What about increased compensation transparency? Better communication? Fostering a collaborative environment in every sense possible?
Politics is always a misunderstood interpretation of other people's motives. "He's just in it for the money." "She only thinks of herself." These statements are too general and not true. A person could not live a whole life like that, it won't work.
People want to collaborate, they just don't know how. Seek to understand other people, then help them understand your perspective, and you start knocking out politics
Never forget the reverse side of this kind of compensation: it's a brake in the way of compensating outstanding performance. That intern that conceived, championed and shipped the FogCreek job board that ultimately brought in $1 million ? Joel wavered in circles for 4000 words before explaining he only got thanks. I wonder if he stayed at Fog Creek.
This type of compensation structure might work for programmers, but I think it would be extremely problematic to implement for many other classes of employees essential to a successful company. Specifically, this wouldn't work for people who function within a highly mercantile ethos, for whom the exertion of leverage in negotiation, political connections, and aggressively tiered performance-based compensation are expected and customary as a key determinant of compensation.
These dynamics, which generally offend the sensibilities of engineers and people who are accustomed to perceiving the world in highly deterministic, logical ways, play to the strengths of "sales sharks," marketing professionals, regional/channel managers, etc. It is not in these people's interest to have salaries transparently tiered, disclosed, or roughly equal for identical classes of role. If these people couldn't do some combination of (manipulate | persuade | flatter | schmooze | arm-twist) someone into giving them higher compensation, they aren't very good salespeople.
They would come to see a business with Fog Creek-like political conditions governing compensation as having perhaps noble goals, but not competitive compared to other opportunities at other companies. However, a successful company needs a certain amount of these people in order to grow.